Competitive Intelligence Ethics

illustration by Cat Scott

Is Competitive Intelligence The Same As Spying?

When I am at a dinner party and someone asks me, “What do you do for a living?” I often find myself hesitating, searching for an easy and understandable explanation of exactly what it is that I do. I have had this conversation literally a thousand times:

“So what do you do?”

“I run a global competitive intelligence consulting firm.” I throw “consulting” in there because in fact that is what we do…and because it sounds credible.

“Um, I see. So what is ‘Competitive Intelligence’?”

This part I have rehearsed over the years so it comes very naturally, maybe a little to mechanical sometimes, “Well, basically, if a company wants to find out what their competitors are working on, they hire us to find out.”

At this point I can actually begin a silent countdown in my head as I watch them processing this information.

3…

The response is always the same.

2…

Here it comes.

1…

A smile, then a flash in their eyes as the false realization sinks in, “Oh, so you’re a corporate spy!”

Boo. Wrong. Not at all, you dummy. That is what I think but not what I say, of course. What I say is much kinder but perhaps a little over simplified, “Well, sort of, except that we have strict laws and ethics that we have to follow.”

Okay, so I won’t be given any awards for the most concise and accurate definition of competitive intelligence, but keep in mind, this is a dinner party conversation we are talking about. If given more time, and under the right circumstances, I would say this:

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Competitive Intelligence (CI), as an industry, is not that unlike market research. In fact, in many companies the CI function falls under the market research budget and organizational structure. However, most of these companies limit their competitive intelligence activity to secondary research(find out more on this in The Four Disciplines of Competitive Intelligence.) Secondary research relies on leveraging published data via the internet, periodicals, public records or syndicated reports, in order to construct a profile of a competitor. This type of research is very benign and few people would have any qualms with the ethics or legality of Googling information on your competitor in order to gain some insight.

The rub usually occurs with primary research competitive intelligence. Primary research competitive intelligence refers to research that involves direct contact (in person, on the phone or via email) with individuals for the purpose of gathering intelligence about a company, product, or an industry. Generally, this direct contact is focused on individuals with first-hand access to the information the researcher wants to know. Unlike qualitative market research, the purpose is not to gather opinions about a topic from a thought leader, but instead, to gather facts from key stakeholders and decision makers.

There are two potential ethical and legal pitfalls here:

That often the best sources for this kind of information are actual competitor employees, and there are legal and ethical guidelines on what a researcher can say or do in order to get this information. I won’t go into all the details here, but in simplest terms, a researcher must use his or her real name and they may not falsify their place of employment. In other words, a researcher cannot call a company and claim to work for IBM or Techtrend unless of course they actually work for IBM or Techtrend.

That legally they cannot gather information that has been clearly designated as confidential, even if the information was collected inadvertently.

Early in my competitive intelligence career I had a colleague and mentor tell me, “Getting the information is easy if you cheat, but we don’t cheat. We do it the right way because we are professionals.” I use this statement often when training new competitive intelligence analysts. If you are willing to lie and make false statements then it is not hard to get whatever kind of information you want – but at what risk? Competitive intelligence professionals understand that the risk is not worth it. By gathering information unethically or illegally you put yourself and your client at great risk, a risk far greater than any benefit they may gain from the information you gathered inappropriately.

To avoid these pitfalls, primary research competitive intelligence professionals use techniques that enable us to gather information directly from stakeholders without breaking the rules. It is harder, and it takes longer, but in the end the intelligence is reliable and risk free. Sometimes it means that we have to make a hundred phone calls in order to talk to ten people, and seldom will any one of those people tell us everything we need to know. However, each person can provide a piece of the puzzle that when assembled gives us the whole picture.

Competitive Intelligence is not spying. Yes, there are those unscrupulous individuals that break the rules; every industry has those. Competitive intelligence professionals are consultants that have developed techniques that enable us to ethically and legally provide a client with detailed and accurate insight into a competitor’s activity, plans and motives. We can do this legally, ethically and… without spying.